Federal budget promises help for seniors, homebuyers and workers

Thestar.com
March 20, 2019
Karen Merk

The Liberal government’s chicken-in-every-pot election budget sprinkles billions in new spending to help millennial homebuyers, financial support for seniors, new skills training for working people and dozens of other initiatives as Canadians prepare for the fall vote.

Titled “Investing in the Middle Class,” the budget puts a bookend on the Liberals’ four years in power with a dash of new spending and no promise to balance the books in the short term.

Prime Minister Justin Trudeau, right, and Minister of Finance Bill Morneau arrive in the Foyer of the House of Commons to table the budget, on Parliament Hill in Ottawa on March 19, 2019.

“What’s clear is that our approach has worked. We’ve put in place investments that allow families to have more money in their pocket, and they’ve put that money back into the economy and our economy has done well,” Finance Minister Bill Morneau told reporters.

The budget is filled with an array of measures that target Canadians across demographic lines and geography, giving Liberals plenty of opportunities to reannounce budget measures across the country in the weeks and months ahead.

Morneau said Tuesday’s budget builds on the initiatives of the government’s past budgets, notably the income tax cut and the child benefit, two measures that he said have meant an extra $2,000 a year for a family of four and have lifted almost 280,000 children out of poverty.

“We know there is more to do. We know that Canadians still feel anxious about their future that’s the frame for our budget this year,” he said.

As he prepared for the election ahead, Morneau was unrepentant about one key broken promise of the last campaign -- the Liberal vow to balance the books by 2019.
Instead, he cited the deficit -- projected to grow to $16.8 billion in the next fiscal year, not including a $3-billion contingency -- as a point of contrast between his government and the Conservatives, one that is sure to play out on the election trail.

“We’re making investments in Canadians’ future. We’re doing it in a fiscally responsible way,” Morneau told reporters.

“The Opposition would like us to see cuts very rapidly. Their idea is to balance the budget at any cost. Well, if we had taken that approach in 2015, we would not be where we are today. We’d be in a more difficult spot (with) cuts and challenges for middle-class families,” he said.

Just as their first budget in 2016 hit high-income earners with a tax hike, Tuesday’s budget contains a zinger, too, with a move to restrict the tax break on executive stock options at mature corporations.

The fiscal blueprint -- the fourth and last from this government before the October vote -- details $22.8 billion in new spending over the next six years.

Among the key measures:

• Making home ownership more affordable. First-time buyers will be able to finance a portion of a home purchase through a shared equity mortgage with Canada Mortgage and Housing Corp., helping to lower monthly mortgage payments. As well, homebuyers will be able to tap up to $35,000 of their RRSP, up from $25,000, for a home purchase. “We’re recognizing that is challenging for people in the housing market,” Morneau said.
• A new Canada Training Credit that will allow workers between 25 and 64 to accumulate $250 a year, to a lifetime limit of $5,000, that can be applied to training costs. A new employment insurance measure will help workers who take leave for training.
• More work opportunities for young people. The budget promises to create 84,000 new student work placements over the next five years. That doesn’t meet the shortfall of 150,000 that experts say exists today. It also cuts interest rates on Canada Student Loans. “For young people, this year’s budget will be enormously important,” Morneau said.
• More than $2 billion for municipalities for local infrastructure, meant in part to speed up the rollout of the infrastructure program.
• $1.4 billion for social services for Indigenous children, including therapy, educational support, mental health services and steps to provide services closer to home. An additional $739 million is earmarked over five years to continue efforts to bring clean water to Indigenous communities. And $333 million is pledged to support Indigenous languages.

The budget rolls out dozens of other spending initiatives. There’s the promise of new air ambulance helicopters for the Prairies and new ferries for Atlantic Canada. It doubles funding -- rising to $4 million a year -- offered to religious sites such as mosques and synagogues to install security measures. There’s a $5,000 tax credit for those who purchase zero-emission vehicles, a pledge to create a cross-Canada suicide prevention service and a new strategy to bring high-speed internet to every household and business in Canada by 2030. That alone could cost as much as $6 billion.

The budget pledges up to $3.9 billion to compensate dairy, poultry and egg farmers -- many of them in Ontario and Quebec -- for lost business that results from trade deals with the United States and Mexico and with the European Union that have cracked open Canada’s market to outside suppliers.

But there’s aid for other sectors, too -- $251 million to help the forestry industry “innovate and grow,” and another $100 million for the oil and gas industry, adding to investments made in last year’s budget.

Together, it all adds up to an “election” budget, according to Kevin Page, former parliamentary budget officer.

Page says he counted more than 100 individual budget measures with extra revenue taken in by the government “sprinkled everywhere.”

“There’s a lot for a lot of different people,” said Page, who is now president of the Institute of Fiscal Studies and Democracy at the University of Ottawa.

“It’s not necessarily the kind of budget that says, ‘OK, we really want to move the economy in a different direction, so we’re going to nudge it in a significant way,’” Page said.

“It’s more set up as an election platform, like what did you do for first-time homebuyers or what did you do for seniors?” Page said.

Hassan Yussuff, president of the Canadian Labour Congress, called the budget provisions on skills training a “game-changer” guaranteeing workers time off to take training and the means to pay for it.

“For the first time as a nation, we are saying that training is a right and you’re entitled to have one week of training per year. You’re going to get some EI and you’re going to get some tuition refund,” he said an interview.

And he said the budget measures to reduce the clawback on working seniors will reduce poverty levels among older people.

The budget takes the initial steps toward a national pharmacare program with the creation of an agency to co-ordinate drug purchases and craft a national list of prescription drugs. The first priority is costly drugs for rare diseases.

Canada Without Poverty praised the moves on pharmacare, calling it a critical step for Canadians who today can’t afford their medication, but voiced concern it doesn’t go far enough.

“There is an urgency to address unaffordability of necessary pharmaceuticals, especially for seniors and persons with disabilities, that we don’t see reflected in this budget,” Michèle Biss, the organization’s policy director and a human rights lawyer, said in a statement.

But she took issue with the budget’s focus on the middle class and home ownership, saying it was “out of step” with the urgent need to address homelessness and lack of affordable housing.

“The measures in this budget fall short of meeting the needs of people in poverty, especially young people, many of whom are not in a position to purchase a home,” she said.

Liberal aspirations that the budget would turn the page on the running SNC-Lavalin controversy were shattered by Commons chaos Tuesday afternoon. Opposition anger over Liberal moves earlier in the day to shut down a committee investigation into the affair spilled over into the Commons, as Conservative MPs shouted down Morneau as he attempted to deliver the budget speech.

“Conservatives will not sit idly by as Liberals destroy the integrity of our justice system,” said Conservative Leader Andrew Scheer, who accused the Liberals of trying to using the budget spending to “cover up” the SNC Lavalin issue.